Ally Financial Inc., a diversified financial services company, provides a range of financial products and services for consumers, businesses, automotive dealers, and corporate clients in the United States. It offers dealer financial services, including automotive finance and insurance products, mortgage finance, and corporate finance. The company also provides automotive finance services for consumers and automotive dealers, such as inventory financing and leasing for new and used vehicles; term loans, including real estate, automotive fleet financing, and transportation and equipment financing; and vehicle remarketing services, as well as vehicle service contracts (VCSs) and guaranteed asset protection (GAP) waiver products. In addition, it offers retail automotive financing for new and used vehicles, and leasing for new vehicles; consumer finance protection and insurance products, such as VSCs, vehicle maintenance contracts (VMCs), and GAP products; and commercial insurance products. Further, the company, through its subsidiary, Ally Bank provides savings and money market accounts, certificates of deposit, interest-bearing checking accounts, trust accounts, and individual retirement accounts; and online and mobile banking, electronic bill pay, remote deposit, and electronic funds transfer. It also engages in the management of held-for-investment mortgage loan portfolio that includes the execution of bulk purchases of jumbo and low-to-moderate income mortgage loans originated by third parties. The company was formerly known as GMAC Inc. and changed its name to Ally Financial Inc. in May 2010. Ally Financial Inc. was founded in 1919 and is headquartered in Detroit, Michigan.
Business Analysis of Ally Financial
The Financial Services Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Ally Financial compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Ally Financial to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Ally Financial with an interactive chart.
- Revenue Growth: Ally Financial reported a revenue growth of 11.8% year-on-year during 2016. Consumer Finance Industry grew at 5.0% in the same period
- COGS share of Revenues: As a percentage of revenue, Ally Financial spent 6.3% of its total revenues on COGS. Consumer Finance industry average (COGS share of revenue) in the same period was 4.5%
- R&D share of Revenues: Ally Financial R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Ally Financial spent 18.2% of its total revenues on Sales, Marketing, and General Administration (SG&A). Consumer Finance industry average SG&A spending in the same period was 43.3%
- Inventory share of Revenues: Ally Financial Inventory share of Revenues details are not available because either company does not share the data or we do not have it
- Accounts Payable share of Revenues: As a percentage of revenue, Ally Financial invested 6.5% of its total revenues on Accounts Payable (A/P) Consumer Finance industry average Accounts Payable investment in the same period was 16.5%
- Accounts Receivable share of Revenues: As a percentage of revenue, Ally Financial invested 35.0% of its total revenues on Accounts Receivable (A/R). Consumer Finance industry average Accounts Receivable investment in the same period was 64.7%
- PP&E share of Revenues: Ally Financial PP&E share of Revenues details are not available because either company does not share the data or we do not have it
- Intangibles share of Revenues: Ally Financial Intangibles share of Revenues details are not available because either company does not share the data or we do not have it
- Net Margins: Ally Financial Net Margins in the year 2016 were 19.6%. Consumer Finance industry average Net Margins in the same period were 22.9%
Sector and Industry Association of Ally Financial
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.
Ally Financial is associated with Financials Sector Group, Financial Services Sector, and Consumer Finance Industry.
Financial Services sector is comprised of the following industries: Investment Services; Consumer Finance; Payment and Transaction Processing Services; Financial News, Research and Data. The definitions for each of the industries is as follows:
- Investment Services industry includes investment banking companies, asset management companies, securities brokers and dealers, online brokers, and security/commodity exchanges.
- Consumer Finance industry includes companies providing credit services and mortgage finance services.
- Payment and Transaction Processing Services industry includes companies providing financial news, research, and data services.
- Financial News, Research and Data industry includes companies providing payments and transaction processing services.
Industry Ranking of Ally Financial
With $5.4 billion revenues, Ally Financial ranked number 7 of all the companies in the US Consumer Finance industry. There were a total of 48 public companies in the US Consumer Finance industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Consumer Finance industry by revenues during 2016 were:
- American Express ($30.1 billion)
- Capital One Financial ($19 billion)
- Visa ($15.1 billion)
- Mastercard ($10.8 billion)
- Discover Financial Services ($7.2 billion)
- Synchrony Financial ($7 billion)
- Ally Financial ($5.4 billion)
- Equifax ($3.1 billion)
- Santander Consumer USA Holdings ($2.3 billion)
- CIT Group Inc ($2.1 billion)
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.
- Conduct a holistic benchmarking; to identify and target additional sources of value
- Get in touch with us to learn more about Business Model Analysis Framework
- Get free data, charts, and analysis of Ally Financialand its peers on select key performance indicators by clicking the reports provided below